UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly
period ended March 31, 2015
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to
________
COMMISSION FILE NUMBER 000-54504
NOUVEAU VENTURES, INC.
(Exact name of registrant as specified in its charter)
NEVADA |
|
27-4636847 |
(State or other
jurisdiction of incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
|
|
|
37631 Alianthus Lane |
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Palmdale, CA |
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93551 |
(Address of principal
executive offices) |
|
(Zip Code) |
(818) 249-1157
|
(Registrant's telephone number, including area code)
|
3254 Prospect Ave., La Crescenta, CA 91214
|
(Former name, former address and former fiscal year,
if changed since last report)
|
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post
such files). [X] Yes [ ] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ] |
Accelerated
filer [ ] |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) |
Smaller
reporting company [X] |
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
Indicate
the number of shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date: As of August 27, 2015, the
Registrant had 50,018,888 shares of common stock outstanding.
PART I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS.
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X,
and, therefore, do not include all information and footnotes necessary for a
complete presentation of financial position, results of operations, cash flows,
and stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position
have been included and all such adjustments are of a normal recurring nature.
Operating results for the three months ended March 31, 2015 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2015.
As
used in this Quarterly Report, the terms “we,” “us,” “our,” “Nouveau,” and the
“Company” mean Nouveau Ventures, Inc. and its subsidiaries, unless otherwise
indicated. All dollar amounts in this Quarterly Report are expressed in U.S.
dollars, unless otherwise indicated.
2
NOUVEAU VENTURES INC.
(FORMERLY SAASMAX INC.)
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
March 31, 2015 |
|
|
December 31, 2014 |
|
|
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(unaudited) |
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ASSETS |
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Current assets: |
|
|
|
|
|
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Cash |
$ |
- |
|
$ |
551 |
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Total current assets |
|
- |
|
|
551 |
|
|
|
|
|
|
|
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Patent Technolgy |
|
57,877 |
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|
58,787 |
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|
|
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Total assets |
$ |
57,877 |
|
$ |
59,338 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current liabilities: |
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Accounts payable and accrued expenses |
$ |
115,943 |
|
$ |
99,810 |
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Loans payable - related party |
|
40,198 |
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37,695 |
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Total current liabilities |
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156,141 |
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137,505 |
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Total liabilities |
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156,141 |
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137,505 |
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Commitments and contingencies |
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Stockholders' deficit |
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Preferred stock, $0.001 par value; 20,000,000 shares authorized, no shares issued and outstanding as of March 31, 2015 (unaudited) and December 31, 2014, respectively. |
|
- |
|
|
- |
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Common stock, $0.001 par value; 1,200,000,000 share authorized, 50,018,888 shares issued and outstanding as of March 31, 2015 (unaudited) and December 31, 2014, respectively |
|
50,019 |
|
|
50,019 |
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Additional paid-in capital |
|
1,411,148 |
|
|
1,264,335 |
|
Accumulated deficit |
|
(1,559,431 |
) |
|
(1,392,521 |
) |
Total stockholders' deficit |
|
(98,264 |
) |
|
(78,167 |
) |
|
|
|
|
|
|
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Total liabilities and stockholders' deficit |
$ |
57,877 |
|
$ |
59,338 |
|
The accompanying footnotes are an intergral part of these
condensed consolidated unauidted financial statements
3
NOUVEAU VENTURES INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
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Three months ended March 31, |
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2015 |
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2014 |
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Revenues |
$ |
- |
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$ |
- |
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Operating expenses |
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Professional fees |
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12,780 |
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19,312 |
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Stock based compensation |
|
146,813 |
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|
9,375 |
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General and administrative |
|
7,317 |
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|
2,845 |
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Total operating expenses |
|
166,910 |
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|
31,532 |
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|
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|
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|
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Net operating loss from continuing operations |
|
(166,910 |
) |
|
(31,532 |
) |
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|
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Other income |
|
|
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Gain on cancellation of Earn-Out Shares |
|
- |
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18,750 |
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Total other income |
|
- |
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18,750 |
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Net loss from continuing operations |
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- |
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(12,782 |
) |
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Discontinued operations: |
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Loss from discontinued operations |
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- |
|
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(2,421 |
) |
|
|
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Net loss |
$ |
(166,910 |
) |
$ |
(15,203 |
) |
|
|
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Weighted average number of common shares outstanding |
|
|
|
|
|
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- basic and fully diluted |
|
50,018,888 |
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|
56,318,888 |
|
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Net loss per share - Basic and fully diluted |
|
|
|
|
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From continuing operations |
$ |
(0.00* |
) |
$ |
(0.00* |
) |
From discontinued operations |
|
- |
|
|
(0.00* |
) |
Net loss per share - basic and fully diluted |
$ |
(0.00* |
) |
$ |
(0.00* |
) |
*
denotes a loss of less than $(0.01) per share.
See accompanying notes to the condensed
consolidated unaudited financial statements
4
NOUVEAU VENTURES INC.
FORMERLY SAASMAX, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
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Three months ended March 31, |
|
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2015 |
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2014 |
|
|
|
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Cash flows from operating activities |
|
|
|
|
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Net loss |
$ |
(166,910 |
) |
$ |
(15,203 |
) |
Loss from discontinued operations |
|
- |
|
|
2,421 |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
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Stock based compensation |
|
146,813 |
|
|
9,375 |
|
Gain on cancellation of Earn-Out Shares |
|
- |
|
|
(18,750 |
) |
Depreciation and amortization |
|
910 |
|
|
- |
|
Changes in operating assets and liabilities |
|
|
|
|
|
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Accounts payable and accrued expenses |
|
16,133 |
|
|
13,163 |
|
Net cash used in operating activities - continuing operations |
|
(3,054 |
) |
|
(8,994 |
) |
Net cash used in operating activities - discontinued operations |
|
- |
|
|
- |
|
Net cash used in operating activities |
|
(3,054 |
) |
|
(8,994 |
) |
|
|
|
|
|
|
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Cash flows from investing activities |
|
|
|
|
|
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Net cash used in investing activities - continuing operations |
|
- |
|
|
- |
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Net cash used in investing activities - discontinued operations |
|
- |
|
|
- |
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Net cash provided (used in) investing activities |
|
- |
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- |
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|
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Cash flows from financing activities |
|
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|
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Proceeds from loan payable - related party |
|
2,503 |
|
|
7,500 |
|
Net cash provided by financing activities - continuing operations |
|
2,503 |
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|
7,500 |
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Net cash provided by financing activities - discontinued operations |
|
- |
|
|
- |
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Net cash provided by financing activities |
|
2,503 |
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|
7,500 |
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|
|
|
|
|
|
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Net increase (decrease) in cash |
|
(551 |
) |
|
(1,494 |
) |
|
|
|
|
|
|
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Cash, beginning of period |
|
551 |
|
|
4,670 |
|
|
|
|
|
|
|
|
Cash, end of period |
$ |
- |
|
$ |
3,176 |
|
|
|
|
|
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Supplemental disclosure of cash flow information: |
|
|
|
|
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Income taxes paid |
$ |
- |
|
$ |
- |
|
Interest paid |
$ |
- |
|
$ |
- |
|
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|
|
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Supplementary disclosure of noncash financing activities: |
|
|
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Cancellation of shares of common stock |
$ |
- |
|
$ |
9,000 |
|
See accompanying notes to the condensed
consolidated unauidted financial statements
5
Nouveau Ventures Inc.
(FORMERLY SAASMAX INC.)
NOTES TO CONDENSED CONSOLIDATED UNAUDITED
FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2015 AND 2014
NOTE 1 – NATURE OF
BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nouveau
Ventures Inc. (“Nouveau”, the “Company”, “we”, “us” or “our”) was incorporated
on January 19, 2011 (“Inception”) in the State of Nevada under the name SaaSMAX,
Inc (“SaaSMAX”).
Effective
September 8, 2014, SaaSMAX changed its name to Nouveau Ventures Inc.
From
Inception through the end of June 2013, the Company developed and launched an
online global business-to-business marketplace for software-as-a-service
(“SAAS”) providers, resellers and users. On July 1, 2013, the Company
transferred all of its assets and business operations to SaaSMAX Corp.
(“Corp”), the Company’s then wholly-owned subsidiary, in exchange for Corp
assuming all of the Company’s indebtedness at that date, other than Convertible
Notes totaling $225,000. On July 10, 2013, the Company entered into a Share
Exchange Agreement (the “Share Exchange Agreement”) with Dina Moskowitz, the
Company’s sole Executive Officer and Director whereby Ms. Moskowitz cancelled
25,880,448 of her common shares of the Company, in consideration for her
acquisition of all of the issued and outstanding common shares of Corp. See
further discussion in Note 2 – Discontinued Operations.
Effective July, 9,
2013, we decided to shift our business operations to the marketing, selling and
distribution of a propane diesel dual fuel retrofit system (“DFRS Products”)
owned by California Clean Air Technologies, LLC, a Nevada limited liability
company (“CCAT”).
In August, 2014, we
acquired a patented technology for optimizing airflow to internal combustion
engines to create more power (the “Quantumcharger Technology”) and inventions
utilizing the Quantumcharger Technology that are the subject of United States
Patent No. US 7,849,840 (the “Patent”).
During the period
ended March 31, 2015, the Company elected not to proceed with the distribution
of DFRS products and elected to allow their exclusive distributor agreement
with CCAT to remain in default for lack of payment of royalties. We provided in
full against the cost of our CCAT distributor agreement as of December 31, 2014
as further described in in Note 2 – Discontinued Operations.
6
Consequently, the
Company has now shifted its focus to its developing its Quantumcharger
Technology.
Going concern
As
of March 31, 2015, we had current assets of $0 and current liabilities of $156,141,
resulting in a working capital deficit of $156,141. We had neither the funds
nor an established profitable business to finance payment of our liabilities in
the normal course of business or of our ongoing business plan. No assurance can
be given that the Quantumcharger Technology acquired (see Note 5) will be
successful and result in profits for the Company. Our business plan requires
that we raise additional capital to fund our operations throughout 2015 and
there can be no assurance that we will be able to raise any or all of the
capital required. We have generated no revenue from our operations either from
our Quantumcharger Technology or as a distributor of DRFS Products and have accumulated
a net loss of $1,599,431 up to March 31, 2015. We will have to obtain
additional funding from the sale of our securities, the sale of debt
instruments or from strategic transactions in order to fund our current level
of operations and there can be no assurance that we will be able to raise any
or all of the capital required. If the Company is unable to generate sufficient
cash flow from operations and, or, continue to obtain financing to meet its
working capital requirements, it may have to curtail its business sharply or
cease business altogether.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern that contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. However,
the ability of the Company to continue as a going concern on a longer-term
basis will be dependent upon the ability to generate sufficient cash flow from
operations to meet its obligations on a timely basis, the ability to
successfully raise additional financing, and the ability to ultimately attain
profitability.
Basis of presentation
The
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and
are presented in US dollars. The Company’s year-end is December 31.
7
Unaudited Interim Financial Statements
The
accompanying unaudited interim condensed consolidated financial statements have
been prepared in accordance with GAAP for interim financial information in
accordance with Article 8 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by GAAP for complete financial
statements. In our opinion, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included. While
we believe that the disclosures presented herein are adequate and not
misleading, these interim condensed consolidated financial statements should be
read in conjunction with the audited consolidated filed with the SEC in our
Form 10K on August 3, 2015. Operating results for the interim periods presented
are not necessarily indicative of the results for the full year.
Development Stage Company
In
June 2014, the Financial Accounting Standards Board ("FASB") issued
update ASU 2014-10, “Development Stage Entities (Topic
915)”. Amongst other things, the amendments in this update
removed the definition of development stage entity from Topic 915, thereby
removing the distinction between development stage entities and other reporting
entities from US GAAP. In addition, the amendments eliminate the requirements
for development stage entities to (1) present inception-to-date information on
the statements of income, cash flows and shareholders’ equity, (2) label the
financial statements as those of a development stage entity; (3) disclose
a description of the development stage activities in which the entity is
engaged and (4) disclose in the first year in which the entity is no longer a
development stage entity that in prior years it had been in the development
stage. The amendments are effective for annual reporting periods
beginning after December 31, 2014 and interim reporting periods beginning after
December 15, 2015, however entities are permitted to early adopt for any annual
or interim reporting period for which the financial statements have yet to be
issued. Accordingly the Company has no longer labeled the financial
statements as those of a development stage entity and have not presented
inception-to-date information on the accompanying financial statements.
8
Use of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash
For
purposes of the balance sheet and statement of cash flows, the Company
considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
Financial Instruments
Pursuant
to the Accounting Standards Codification (“ASC”) No. 820, “Disclosures about
Fair Value of Financial Instruments”, the Company records its financial
assets and liabilities at fair value. ASC No. 820 provides a framework for
measuring fair value, clarifies the definition of fair value and expands
disclosures regarding fair value measurements. ASC No. 820 establishes a
three-tier hierarchy, which prioritizes the inputs used in the valuation
methodologies in measuring fair value:
Level
1—Inputs are unadjusted, quoted prices in active markets for identical assets
or liabilities at the measurement date.
Level
2—Inputs (other than quoted prices included in Level 1) are either directly or
indirectly observable for the asset or liability through correlation with
market data at the measurement date and for the duration of the
asset/liability’s anticipated life.
Level
3—Inputs reflect management’s best estimate of what market participants would
use in pricing the asset or liability at the measurement date. Consideration is
given to the risk inherent in the valuation technique and the risk inherent in
the inputs to the model.
9
The
fair value of a financial instrument is the amount for which the instrument
could be exchanged in a current transaction between willing parties. Cash,
accounts payable, accrued expenses and loan payable related party approximate fair
value because of the short maturity of these instruments. The Company currently
has no other financial assets or liabilities that are measured at fair value.
The
Company’s non-financial assets, which consist of Patent Technology (see Note 5),
are not required to be measured at fair value on a recurring basis. However, if
certain triggering events occur, or if an annual impairment test is required
and the Company is required to evaluate the non-financial asset for impairment,
a resulting asset impairment would require that the non-financial asset be
recorded at the fair value.
Intangible Assets
Purchased
intangible assets are recorded at cost, where cost is the amount of cash or
cash equivalents paid or the fair value of other consideration given to acquire
an asset at the time of its acquisition. The cost of such an intangible asset
is measured at fair value unless the exchange transaction lacks commercial
substance or the fair value of neither the asset received nor the asset given
up is reliably measurable. If the fair value of either the asset received or
the asset given up can be measured reliably, then the fair value of the asset
given up is used to measure cost unless the fair value of the asset received is
more clearly evident.
Intangible
assets with finite useful lives that are acquired separately are carried at
cost less accumulated amortization and accumulated impairment losses.
Amortization is recognized on a straight-line basis over their estimated useful
lives. The estimated useful life and amortization method are reviewed at the
end of each reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis. Intangible assets which have indefinite
lives are not amortized, and are stated at cost less accumulated impairment
losses.
10
Income Taxes
The
Company accounts for income taxes in accordance with FASB ASC 740 "Income
Taxes". Under FASB ASC 740, deferred income taxes are recognized for the
tax consequences in future years of differences between the tax bases of assets
and liabilities and their financial statement reported amounts at each period
end, based on enacted tax laws and statutory tax rates applicable to the
periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amounts expected to be realized. The provision for income taxes
represents the tax expense for the period, if any, and the change during the
period in deferred tax assets and liabilities. FASB ASC 740 also provides
criteria for the recognition, measurement, presentation and disclosure of
uncertain tax positions. Under FASB ASC 740, the impact of an uncertain tax
position on the income tax return may only be recognized at the largest amount
that is more-likely-than-not to be sustained upon audit by the relevant taxing
authority. As of March 31, 2015 and December 31, 2014, a full deferred tax
asset valuation allowance has been provided and no deferred tax asset has been
recorded.
Revenue recognition
The
Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i)
persuasive evidence of an arrangement exists, (ii) the product has been shipped
or the services have been rendered to the customer; (iii) the sales price is
fixed or determinable, and (iv) collectability is reasonably assured. Deferred
revenues shall be recorded when cash has been collected, however the related
service has not yet been provided
Advertising Expense
Advertising is expensed as incurred. We did
not incur advertising expense during the three ended March 31, 2015 and 2014.
11
Stock-based compensation
Stock
based compensation expense is recorded for stock and stock options awarded in
return for services rendered. The expense is measured at the grant-date fair
value of the award and recognized as compensation expense on a straight-line
basis over the service period, which is the vesting period. The Company
estimates forfeitures that it expects will occur and records expense based upon
the number of awards expected to vest.
Net loss per common share
Net
loss per common share is computed pursuant to ASC No. 260 “Earnings per Share”.
Basic net loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period. Diluted
net loss per share is computed by dividing net loss by the weighted average
number of shares of common stock and potentially outstanding shares of common
stock during each period. Dilutive loss per share excludes all potential common
shares if their effect is anti-dilutive.
No
potentially dilutive debt or equity instruments were issued or outstanding
during the three months ended March 31, 2015 or 2014.
Recently issued accounting
pronouncements
The
Company has reviewed all recently issued, but not yet effective,
accounting pronouncements and does not believe the future adoption of any such
pronouncements may be expected to cause a material impact on our financial
statements.
NOTE
2 – DISCONTINUED OPERATIONS
A) CCAT Exclusive
Distributorship
During the period
ended March 31, 2015, the Company elected not to proceed with the Exclusive
Distributor Agreement (see Note 4) and to allow their exclusive distributor
agreement with CCAT to remain in default for lack of payment of royalties. Accordingly,
we provided in full against the remaining cost of our CCAT distributor agreement
as of December 31, 2014 and consequently during the year ended December 31,
2014, the Company recorded a loss on the discontinuance of the CCAT
distribution business of $56,250 (2013- $21,263). No expense was incurred in the
three month period ended March 31, 2015 (2014 - $2,421).
12
A) CCAT Exclusive
Distributorship Continued
|
|
Three months ended |
|
|
|
March 31, 2015 |
|
|
March 31,2014 |
|
|
|
|
|
|
|
|
Amortization |
$ |
- |
|
|
2,421 |
|
|
|
|
|
|
|
|
Loss from discontinued operations |
$ |
- |
|
$ |
2,421 |
|
NOTE 3 – RELATED PARTY TRANSACTIONS
As
of March 31, 2015, a shareholder of the Company has loaned us $40,198 (December
31, 2014 - $37,695) for working capital needs. The loans accrue interest at 10%
per annum, compound annually and are due on demand.
On
July 22, 2013, the Company entered into consulting agreements with Mr. Rainer,
to act as Director, Chief Financial Officer, Secretary and Treasurer of the
Company and Mr. Moll, to act as Director, Chief Executive Officer and President
of the Company (the “Consultant(s)”). The consulting agreements were to
continue until July 21, 2023, subject to earlier termination as provided in the
consulting agreements. During the term of the consulting agreements, and
subject to the Company completing equity financing totaling not less than
$1,000,000, the Company shall pay each of the Consultants a base consulting fee
of $5,000 per month in consideration of their services.
Effective
February 4, 2014, Harold C. Moll resigned as our Chief Executive Officer,
President and as a Director. The resignation of Mr. Moll was not due to or
caused by any disagreement with us, related to our operations, policies,
practices or otherwise. Rob Rainer, our Chief Financial Officer, Secretary and
Treasurer and a Director, was appointed our Chief Executive Officer and
President to fill the vacancies resulting from Mr. Moll’s resignation.
13
In
connection with Mr. Moll’s resignation, Mr. Moll agreed to terminate his
Management Consulting Agreement dated July 22, 2013 and surrender to us for
cancellation the 9,000,000 Earn-Out Shares issued to him under his management
consulting agreement. In addition, Mr. Moll agreed to transfer 7,262,304 shares
of our common stock held by him to Rob Rainer.
See also Note 6 Stockholders’
Equity (Deficit) regarding Earn-Out Shares granted to the Consultants.
On the closing of the Patent Technology agreement (Note 5) effective August 23, 2014, under the terms of the Patent Technology agreement, Mr. David St James became a director of the Company, the Company agreed to issue Mr. St James with 200,000 shares of the Company’s common stock at a fair market value of $60,000 and to expend $100,000 per year to develop the technology. In addition, Mr. St James retained a royalty of 5% of gross revenues from exploitation of the technology subject to a minimum royalty payment of $1,500 per calendar month. As of December 31, 2014, the Company had paid Mr. St James royalties of $4,500 and a further $3,000 had been accrued to be paid to Mr. St. James in respect of the minimum royalty payment due for the period ended December 31, 2014. This amount is included in accounts payable as of December 31, 2014. During the period ended March 31, 2015, the Company accrued a further $4,500 in respect of the minimum royalty payment due for the quarter and the paid Mr. St James royalties of $1,500. As of March 31, 2015, $6,000 had been accrued to be paid to Mr. St. James in respect of the minimum royalty payments and this amount was included in accounts payable as of that date. Of this balance payable, $3,000 was paid in April 2015 and the balance in June 2015.
NOTE 4 – EXCLUSIVE DISTRIBUTOR AGREEMENT
The
Company entered into an agreement dated July 9, 2013 (the “Exclusive
Distributor Agreement”) with California Clean Air Technologies, LLC, a Nevada
limited liability company (“CCAT”) whereby the Company obtained the exclusive
distribution rights in Canada (non-exclusive for British Columbia, Alberta and
Saskatchewan) to market, sell and distribute a propane diesel duel fuel
retrofit system (“DFRS Products”) owned by CCAT.
14
CCAT
is a Southern California-based developer, marketer and distributor of diesel
engine retrofit products, including a patent-pending Propane Diesel Dual-Fuel
Retrofit SystemTM (“DFRS”). DFRS is a
retrofit system that demonstrates high (approximately 50%) substitution rates
of propane fuel for diesel fuel without loss of power or torque, while
exhibiting very low emissions of pollutants, such as hydrocarbons (HC),
nitrogen oxides (NOx), carbon monoxide (CO), and particulate matter (PM or
soot).
The
Exclusive Distributor Agreement is for a term of five (5) years unless sooner
terminated in accordance with the provisions of the Exclusive Distributor
Agreement. The Company has the right to extend the Agreement for an
additional five (5) year term, if it is in compliance with the Minimum Royalty
requirements described below.
Under
the terms of the Exclusive Distributor Agreement, as consideration for the
exclusive distribution rights, the Company (i) issued 300,000 shares of its
common stock to CCAT, and (ii) issued a promissory note in the principal amount
of $50,000 payable without interest on July 30, 2013. The promissory note
was paid in full as of December 31, 2013. As additional consideration for the
Exclusive Distributor Agreement, the Company agreed to pay to CCAT a royalty of
$750 per sale of DFRS Products. CCAT was to have the exclusive rights to install
the DFRS Products at a fixed price between $2,500 and $5,000, depending on the
size of the engine. CCAT could, on 30 days written notice, terminate the
Exclusive Distributor Agreement if the Company failed to achieve sufficient
sales to generate Minimum Royalties of $22,500 (Year 1), $37,500 (Year 2),
$60,000 (Year 3), $82,500 (Year 4), and $105,000 (Year 5).
The Exclusive
Distributor Agreement was valued by the Company at $62,500 and was being
amortized over the 5 year term.
During the period
ended March 31, 2015, the Company decided its primary focus would be the
development of the Patent Technology acquired in the current year (see Note 5)
and the Company decided to allow their exclusive distributor agreement with
CCAT to remain in default for lack of payment of royalties. Accordingly, we
provided in full against the remaining $43,820 carrying cost of our CCAT
distributor agreement as of December 31, 2014 and consequently during the year
ended December 31, 2014 the Company recorded a loss on the discontinuance of the
CCAT distribution business of $56,250 (2013- $6,250). No additional cost was
incurred in respect of the CCAT distribution business during the three months ended March 31, 2015 (2014 - $2,421)
15
NOTE 5 – PATENT TECHNOLOGY
On
August 19, 2014, we entered into a Technology Acquisition Agreement (the
“Technology Acquisition Agreement”) with David St. James (the “Inventor”).
Closing of the Technology Acquisition Agreement occurred on August 23, 2014
(“Closing”). Under the terms of the Technology Acquisition Agreement, the
Inventor assigned his right, title and interest in a patented technology for
optimizing airflow to internal combustion engines to create more power (the
“Technology”) and inventions utilizing the Technology that are the subject of
United States Patent No. US 7,849,840 (the “Patent”) in consideration of the
following:
1.
Issuance to the Inventor of 200,000 shares of our common stock (the “Shares”)
valued at $0.30 per share, representing the most recent price for which our
common stock had sold in the market place. The Shares have been issued and are
held in the custody of our legal counsel and are being released to the Inventor
on the following schedule:
(a)
50,000 Shares released on Closing ;
(b)
50,000 Shares released four (4) months after Closing;
(c)
50,000 Shares released eight (8) months after Closing; and
(d)
50,000 Shares released twelve (12) months after Closing.
Notwithstanding
that the certain of the Shares were held in custody and were not released to
the Inventor, all voting and dividend rights in respect of the Shares accrue to
the Inventor and he is entitled to exercise such rights and receive such
benefits in respect of the Shares.
The
50,000 Shares due to Mr. St James at Closing were released to him on August 23,
2014, the 50,000 Shares due to Mr. St James four months after Closing were
released to him on December 23, 2014 and the 50,000 Shares due to Mr. St James
eight months after Closing were released to him on April 23, 2014.
The
Technology Acquisition Agreement was valued at the total fair market value of
the Shares issued of $60,000 in the accompanying balance sheet and is being
amortized over the remaining 16 year life of the Patent.
16
In
the three month period ended March 31, 2015 the Company incurred an
amortization expense of $910 (2014 - $0) in respect of the cost of the Technology
Acquisition Agreement.
2.
The Inventor also retained a royalty of 5% of gross revenues from the
exploitation of the Technology, subject to minimum royalty payments of $1,500
per calendar month.
As of December 31, 2014, the Company had paid Mr. St James royalties of $4,500 and a further $3,000 had been accrued to be paid to Mr. St. James in respect of the minimum royalty payment due for the period ended December 31, 2014. This amount is included in accounts payable as of December 31, 2014. During the period ended March 31, 2015, the Company accrued a further $4,500 in respect of the minimum royalty payment due for the quarter and the paid Mr. St James royalties of $1,500. As of March 31, 2015, $6,000 had been accrued to be paid to Mr. St. James in respect of the minimum royalty payments and this amount was included in accounts payable as of that date. Of this balance payable, $3,000 was paid in April 2015 and the balance in June 2015.
3.
As further consideration for the sale, assignment and transfer of the
Technology, we agreed to make expenditures of $100,000 to develop and
commercialize the Technology within twelve (12) months from Closing.
As
of March 31, 2015, and as of the date of the issuance of these financial
statements, the Company has not had the necessary funding to make the required
$100,000 expenditure to develop and commercialize the Technology and there can
be no assurance that the Company will be able to raise the necessary funding to
do so.
We
have the right to sub-license our interest in the Technology, subject to the
Inventor being paid 30% of all revenues obtained through sub-licensing.
In
the event the Company is unable to fulfill its obligations under items (2) or (3)
above, and such default not being cured within 15 days written notice, the
Technology Acquisition Agreement may be terminated and Nouveau shall re-assign
the Patent and transfer the intellectual property to the Inventor. Any Shares
not released, or scheduled to be released in the next 30 days from the date of
termination shall be returned to the Company for cancellation and the Inventor
shall have no further rights in respect of such Shares. In the event of
termination, the value of the Patent, net of accumulated amortization will be
written down to $0.
17
NOTE 6 – STOCKHOLDERS’ DEFICIT
Effective
April 16, 2014 the Company completed a 12:1 forward stock split and all numbers
for shares of common stock disclosed in these financial statements have been
retrospectively restated for this forward stock split.
No shares of common stock were issued during the three months ended March 31, 2015 or 2014.
Cancellation
of earn out shares
Effective
February 4, 2014, Harold C. Moll resigned as our Chief Executive Officer,
President and as a Director. In connection with Mr. Moll’s resignation, Mr.
Moll agreed to terminate his Management Consulting Agreement dated July 22,
2013 and surrender to us for cancellation the 9,000,000 Earn-Out Shares issued
to him under his management consulting agreement.
Gain on cancellation of earn out shares
As a result of Mr. Moll’s resignation and the cancellation of his earn out shares, we recognized a gain in the amount of $18,750 which is included in other income in the accompanying condensed statements of operations for the period ended March 31, 2014.
Stock
based compensation
On
July 22, 2013, we issued a total of 18,000,000 shares of our common stock (the
“Earn-Out Shares”) to both Mr. Moll and Mr. Rainer under the terms of their
consulting agreements. The Earn-Out Shares are held in the custody of the
Company and will be released on the basis of 10% of the original number of
Earn-Out Shares on each anniversary of the consulting agreements. The Earn-Out
Shares are not beneficially owned by Mr. Moll or Mr. Rainer until they are
released to them on the respective anniversary dates. The Earn-Out Shares may
not be sold, transferred or pledged, and are subject to forfeiture under the
termination provisions of the management consulting agreements. The Earn-Out
Shares were valued at $750,000 based on the grant date fair value and are included
in additional paid in capital as deferred compensation.
During
the period ended March 31, 2015 and 2014, we recognized $146,813 and $9,375 of
stock based compensation related to the earn-out shares in the accompanying
audited statements of operations. A total of 900,000 earn out shares are
released per year (or 225,000 shares per quarter).Stock based compensation is
calculated each quarter using the average fair market value of the stock for
that quarter and multiplying it by 225,000.
18
NOTE 7 –STOCK INCENTIVE PLAN
In accordance with
the Company’s 2011 Stock Incentive Plan, (the “Plan”), we are authorized to
grant up to 12,000,000 shares of common stock, stock options intended to
qualify as Incentive Stock Options, “ISO”, under Section 422 of the Internal
Revenue Code of 1986, as amended, non-qualified options and stock appreciation
rights to our employees, officers, directors and consultants. As a result of
the Share Exchange Agreement, on May 17, 2013 we notified all of our option
holders, holding a total of 5,301,660 stock options, that their options were
being cancelled as they relate to discontinued operations. No shares were
issued or outstanding under this stock incentive plan as at March 31, 2015 or
2014.
NOTE 8 – SUBSEQUENT EVENTS
Effective
April 23, 1014, we released the 50,000 Shares due to Mr. St James under the
terms of the Technology Acquisition Agreement eight months after Closing.
On
August 13, 2015 the Company issued a promissory
note for $15,000 which is payable on demand and bears interest at 10% per annum.
On
August 18, 2015 the Company and David St James mutually agreed to amend the
Technology Acquisition Agreement and extend the expenditure requirement to
develop and commercialize the Technology from twelve (12) to eighteen (18)
months from the date on Closing which was August 23, 2014.
The
Company has evaluated subsequent events from the balance sheet date through the
date the financial statements were issued and determined that, other than as
disclosed above, there are no items to be disclosed.
19
ITEM 2. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Statement
Regarding Forward-Looking Statements
Certain
statements contained in this Quarterly Report on Form 10-Q constitute
"forward-looking statements.” These statements, identified by words such
as “plan,” "anticipate,” "believe,” "estimate,” "should,”
"expect" and similar expressions include our expectations and
objectives regarding our future financial position, operating results and
business strategy. These statements reflect the current views of management
with respect to future events and are subject to risks, uncertainties and other
factors that may cause our actual results, performance or achievements, or
industry results, to be materially different from those described in the
forward-looking statements. Such risks and uncertainties include those set
forth under the caption "Part II, Item 1A. Risk Factors” and elsewhere in
this Quarterly Report on Form 10-Q. We advise you to carefully review the
reports and documents we file from time to time with the United States Securities
and Exchange Commission (the “SEC”), particularly our periodic reports filed
with the SEC pursuant to the Securities Exchange Act of 1934 (the “Exchange
Act”).
OVERVIEW
We
were incorporated on January 19, 2011 under the laws of the State of Nevada. We
were formerly developing and launching an online business-to-business
marketplace and channel management tools for the rapidly growing
software-as-a-service ("SaaS") market (the “SaaSMAX Marketplace”).
Effective July, 9, 2013, we decided to shift our business operations to the
marketing, selling and distribution of a propane diesel dual fuel retrofit
system (“DFRS Products”) owned by California Clean Air Technologies, LLC, a Nevada
limited liability company (“CCAT”). In August, 2014, we acquired a patented
technology for optimizing airflow to internal combustion engines to create more
power (the “Quantumcharger Technology”) and inventions utilizing the
Quantumcharger Technology that are the subject of United States Patent No. US
7,849,840 (the “Patent”).
Subsequent
to the fiscal year ended December 31, 2015, the Company elected not to proceed
with the the marketing, selling and distribution of the CCAT propane diesel
dual fuel retrofit system and elected to allow their exclusive distributor
agreement with CCAT to remain in default for lack of payment of royalties. As
such, the Company has now shifted its focus to the Quantumcharger Technology.
The Quantumcharger™
The Quantumcharger™ is a revolutionary new device which
solves many of the traditional problems of both superchargers and
turbochargers. The Quantumcharger™ is basically a supercharger, either a roots
type or centrifugal, that utilizes an electric motor and one or more clutches,
overrun bearings, or a combination of both depending on the application.
The Quantumcharger™ is capable of providing full boost
on demand at any engine speed, including before the engine has been started.
At lower engine speeds, the electric motor is used to spin the compressor to
whatever speed is needed to create the desired boost. Once the engine is
running at a higher speed, the compressor can then be driven mechanically by
the engine alone to provide boost without the use of the electric motor. This
enables the engine to provide additional power whenever it is needed, at lower
engine speeds with the electric motor or at higher engine speeds just like a
traditional supercharger being driven by the engine. The compressor doesn’t need
to be in operation at all times, usually only during periods of demand for
increased power.
When used in conjunction with a turbocharger, the
Quantumcharger™ can be activated briefly at lower engine speeds to eliminate
the symptoms of turbo lag until the turbocharger is able to provide sufficient
boost on its own.
Providing boost before the engine is started can be
helpful for cold starting diesel engines in colder weather. Also, whenever the
electric motor is not needed for driving the compressor, it can be turned by
the engine
|
20
and used to generate electricity. This feature can provide
substantial cost and space savings since an alternator is no longer needed.
The Quantumcharger™ is used in conjunction with an electronic controller with
various sensors to activate the electric motor, operate electro-magnetic
clutches when used, and facilitate the generation of electricity by the
electric motor. These various actions can be based on several factors
including engine speed, throttle position, intake pressure, and many more.
In modern times we are starting to see a renewed and
very serious demand for innovation. There is currently a race for new
technology as a new trend has developed in the auto industry which has become
known as engine downsizing. Engine downsizing is the practice of using smaller
and lighter engines in vehicles in an attempt to make them more economical,
while at the same time striving to maintain the power of a larger engine for
greater drivability and safety. The Quantumcharger™ is ideal for these modern
needs. It enables new engine configurations that are fuel efficient,
environmentally friendly, and cost effective, while having much more power
available on demand.
RESULTS OF OPERATIONS
Three months
Summary
|
|
Three Months Ended March 31, |
|
|
Percentage Increase / (Decrease) |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
Operating Expenses |
$ |
166,910 |
|
$ |
31,532 |
|
|
429.3% |
|
Loss from Continuing Operations |
|
(166,910 |
) |
|
(31,532 |
) |
|
429.3% |
|
Other Income: |
|
|
|
|
|
|
|
|
|
Gain on cancellation of Earn-Out Shares |
|
- |
|
|
18,750 |
|
|
(100.0% |
) |
Total Other Income |
|
- |
|
|
18,750 |
|
|
(100.0% |
) |
Loss from Discontinued Operations |
|
- |
|
|
(2,421 |
) |
|
(100.0% |
) |
Net Loss |
$ |
(166,910 |
) |
$ |
(15,203 |
) |
|
997.9% |
|
Revenues
We did not record any revenues during the three months
ended March 31, 2015 and 2014. We do not currently have any sales or revenue
history with respect to the Quantumcharger Technology. As such, there is no
assurance that our business efforts in this area will prove to be successful.
Operating Costs and Expenses
Our operating expenses for
continuing operations for the three months ended March 31, 2015 and 2014 are
outlined in the table below:
Operating Expenses |
|
Three Months Ended March 31 |
|
|
Percentage Increase / (Decrease) |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
Professional Fees |
$ |
12,780 |
|
$ |
19,312 |
|
|
(33.8)% |
|
General and Administrative |
|
7,317 |
|
|
2,845 |
|
|
157.2% |
|
Stock Based Compensation |
|
146,813 |
|
|
9,375 |
|
|
1466.0% |
|
TOTAL |
$ |
166,910 |
|
$ |
31,532 |
|
|
429.3% |
|
Our operating expenses increased from $31,532 during
the three months ended March 31, 2014 to $166,910 during the three months ended
March 31, 2015, an increase of $151,707. The increase was principally due to an
increase in stock based compensation of $137,438, general and administrative
expenses of $4,472 partially offset by a decrease of $6,532 in professional
fees.
21
Our operating expenses consisted of consisted of professional
fees, and general administrative expenses and stock based compensation.
Professional fees relates to fees associated with legal
and accounting fees resulting from the filing requirements necessary for a
public company.
General and administrative expenses primarily relate
to management fees, regulatory expenses, depreciation, Internet services,
travel, entertainment, automotive and office expenses.
Stock based compensation relates to earn-in shares
provided to management.
Loss from Discontinued Operations
During the period ended March 31, 2015, the Company decided its primary focus
would be the development of the Patent Technology acquired in the current year
and the Company decided to allow its exclusive distributor agreement with CCAT
to remain in default for lack of payment of royalties. Accordingly, no additional cost
was incurred in respect of the continued CCAT distribution business during the
three month ended March 31, 2015, while we incurred $2,421 in amortization
expense in respect of the cost of the distribution agreement during the three
months ended March 31 , 2014.
Net Loss
We incurred a net loss of $166,910 during the three months ended March 31, 2015
as compared to a net loss of $15,203 during the three months ended March 31,
2014, due to the factor discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
|
|
At March 31, 2015 |
|
|
At December 31, 2014 |
|
|
Percentage Increase / (Decrease) |
|
Current Assets |
$ |
- |
|
$ |
551 |
|
|
(100.0% |
) |
Current Liabilities |
|
(156,141 |
) |
|
(137,505 |
) |
|
(13.6% |
) |
Working Capital Deficit |
$ |
(156,141 |
) |
$ |
(136,954 |
) |
|
(14.01% |
) |
Cash Flows
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
|
|
2015 |
|
|
2014 |
|
Cash Flows (Used In) Operating Activities |
$ |
(3,054 |
) |
$ |
(8,994 |
) |
Cash Flows (Used In) Investing Activities |
|
- |
|
|
- |
|
Cash Flows From Financing Activities |
|
2,503 |
|
|
7,500 |
|
Net Increase (Decrease) In Cash During Period |
$ |
(551 |
) |
$ |
(1,494 |
) |
During the three months ended March 31, 2015 and 2014, funds used in operating activities represented our net losses for the respective periods, adjusted for non-cash gains and losses and for increases in accounts payable and accrued liabilities of $16,133 and $13,163 respectively.
Our
only source of financing for the three-month periods ended March 31, 2015 and
2014 was loans from related
parties.
Our
plan of operation calls for us to spend significantly more than our current
capital resources or the amount of financing that we have been able to obtain
to date. Any substantial financing that we are able to obtain is expected to be
in the form of equity financing.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to stockholders.
CRITICAL ACCOUNTING POLICIES
There
are no material changes to the critical accounting policies and estimates
described in the audited financial statements for the period ended December 31,
2014 included in our Annual Report on Form 10-K filed with the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.
Not
Applicable.
22
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Based upon an evaluation of the effectiveness of our disclosure
controls and procedures performed by our Chief Executive Officer as of the end
of the period covered by this report, our Chief Executive Officer, concluded
that our disclosure controls and procedures have not been effective as a result
of a weakness in the design of internal control over financial reporting
identified below.
We identified material weaknesses in our internal control over
financial reporting primarily attributable to (i) lack of segregation of
incompatible duties; and (ii) insufficient Board of Directors representation.
These weaknesses are due to our inadequate staffing during the period covered
by this report and our lack of working capital to hire additional staff.
Management has retained an outside, independent financial consultant to record
and review all financial data, as well as prepare our financial reports, in
order to mitigate this weakness. Although management will periodically
re-evaluate this situation, at this point it considers that the risk associated
with such lack of segregation of duties and the potential benefits of adding
employees to segregate such duties are not cost justified. We intend to hire
additional accounting personnel to assist with financial reporting as soon as
our finances will allow.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal controls over financial
reporting that occurred during the quarterly period covered by this report that
have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
23
PART
II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
The following are certain risk factors that could
affect our business, financial position, results of operations or cash flows.
These risk factors should be considered along with the forward-looking
statements contained in this Quarterly Report on Form 10-Q because these
factors could cause our actual results or financial condition to differ
materially from those projected in forward-looking statements. The following
discussion is not an all-inclusive listing of risks, although we believe these
are the more material risks that we face. If any of the following occur, our
business, financial position, results of operations or cash flows could be
negatively affected. We caution the reader to keep these risk factors in mind
and refrain from attributing undue certainty to any forward-looking statements,
which speak only as of the date of this Quarterly Report.
We have a lack of operating
history in the engine retrofit industry and there is no assurance that our
business efforts in this field will be successful.
With our acquisition of the
Quantumcharger Technology, we are embarking on a change of business. Although
Rob Rainer, our director and Chief Executive Officer has extensive business
experience, he does not have experience in the engine retrofit industry. Many
of our competitors will have greater experience and/or greater financial
resources than we do at this time. We intend to hire sales and consulting teams
with experience in the engine retrofit industry. However, there is no assurance
that our business efforts in the engine retrofit industry will prove
successful.
Demand for and supply of our
products and services may be adversely affected by several factors, some of
which we cannot predict or control, that could adversely affect our financial
position, results of operations or cash flows.
The demand for our products and
services could be affected by several factors, including:
- economic downturns in the
markets in which we sell our products;
- competition from other
products;
- changes in customer
preferences;
- product obsolescence or
technological changes that render our products less desirable to use or
more expensive to produce;
- changes in environmental
regulations that may make our products illegal to sell in their present
form;
- inability of our supplier
to obtain raw materials used in production due to factors such as work
stoppages, shortages or supplier plant shutdowns; and
- inability to supply
products due to factors such as work stoppages, plant shutdowns or regulatory
changes and exogenous factors, like severe weather.
If any of these events occur,
the demand for and supply of our products and services could suffer, which
could have a material adverse effect on our financial position, results of
operations and cash flows.
24
We face competition from other
retrofit companies, which could adversely affect our sales, results of
operations or cash flows.
We compete with companies that
produce similar products and with companies that produce different products that
are designed for the same end uses. We encounter competition based on several
key criteria, including product performance and quality, product price, product
availability and security of supply, responsiveness of product development in
cooperation with customers and customer service.
We expect that our competitors
will continue to develop and introduce new and enhanced products, which could
cause a decline in the market acceptance of our products. In addition, our
competitors could cause a reduction in the selling prices of some of our
products as a result of intensified price competition. Competitive pressures
can also result in the loss of major customers. An inability to compete
successfully could have an adverse effect on our financial position, results of
operations or cash flows.
We may also experience increased
competition from companies that offer products based on alternative
technologies and processes that may be more competitive or better in price or
performance, causing us to lose customers and result in a decline in our sales
volume and earnings.
Additionally, some of our
customers may already be or may become large enough to justify developing
in-house production capabilities. Any significant reduction in customer orders
as a result of a shift to in-house production could adversely affect our future
sales and operating prospects.
Current and future disruptions
in the global credit and financial markets could limit our access to financing,
which could negatively impact our business.
Domestic and foreign credit and
financial markets have experienced extreme disruption in the past three years,
including volatility in security prices, diminished liquidity and credit
availability, declining valuations of certain investments and significant
changes in the capital and organizational structures of certain financial
institutions. We are unable to predict the likely duration and severity of the
continuing disruption in the credit and financial markets or of any related
adverse economic conditions. These market conditions may limit our ability to
access the capital necessary to grow and maintain our business. Accordingly, we
may be forced to delay raising capital, issue shorter tenors than we prefer or
pay unattractive interest rates, which could increase our interest expense,
decrease our profitability and significantly reduce our financial flexibility.
Overall, our results of operations, financial condition and cash flows could be
materially adversely affected by the disruptions in the global credit and
financial markets.
To service our indebtedness and
other liabilities, we will require a significant amount of cash. Our ability to
generate cash depends on many factors beyond our control.
Our ability to pay interest on
our debt and to satisfy our other debt obligations and other liabilities will
depend in part upon our future financial and operating performance and upon our
ability to renew or refinance borrowings. Prevailing economic conditions and
financial, business, competitive, legislative, regulatory and other factors,
many of which are beyond our control, will affect our ability to make these
payments. While we believe that cash flow from our current level of operations,
available cash and available borrowings will provide adequate sources of
liquidity for at least the next twelve months, a significant drop in operating
cash flow resulting from economic conditions, competition or other
uncertainties beyond our control could create the need for alternative sources
of liquidity. If we are unable to generate sufficient cash flow to meet our
debt service obligations, we will have to pursue one or more alternatives, such
as, reducing or delaying capital or other expenditures, refinancing debt,
selling assets, or raising equity capital.
We cannot assure you, however,
that our business will generate sufficient cash flow from operations or that
future borrowings will be available to us in an amount sufficient to enable us
to pay our indebtedness or to fund our other liquidity needs. We may need to refinance
all or a portion of our indebtedness on or before maturity. We cannot assure
you that we will be able to refinance any of our indebtedness, including our
term loan and revolving credit facility, on commercially reasonable terms or at
all.
25
Because our
stock is a penny stock, stockholders will be more limited in their ability to
sell their stock.
The SEC has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or quotation
system.
Because our securities constitute "penny
stocks" within the meaning of the rules, the rules apply to us and to our
securities. The rules may further affect the ability of owners of shares to
sell our securities in any market that might develop for them. As long as the
quotation price of our common stock is less than $5.00 per share, the common
stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock, to
deliver a standardized risk disclosure document prepared by the SEC, that:
1.
|
contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
|
2.
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contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;
|
3.
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contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;
|
4.
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contains a toll-free telephone number for inquiries on disciplinary actions;
|
5.
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defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and
|
6.
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contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.
|
The broker-dealer also must provide, prior to effecting
any transaction in a penny stock, the customer with: (a) bid and offer
quotations for the penny stock; (b) the compensation of the broker-dealer and
its salesperson in the transaction; (c) the number of shares to which such bid
and ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.
Not
Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE
SAFETY DISCLOSURES.
None.
26
ITEM 5. OTHER
INFORMATION.
None.
ITEM 6. EXHIBITS.
The following exhibits are either provided with this
Quarterly Report or are incorporated herein by reference:
Exhibit
Number
|
|
Description of Exhibit
|
2.1
|
|
Agreement and Plan of Merger
dated August 20, 2014 between SaaSMax Inc. (as surviving company) and Nouveau
Ventures Inc. (as merging entity).(9)
|
3.1
|
|
Articles of Incorporation.(1)
|
3.2
|
|
Bylaws.(1)
|
3.3
|
|
Bylaw No. 2A to Article III -
Directors.(5)
|
3.4
|
|
Certificate of Change Pursuant
to NRS 78.209.(7)
|
3.5
|
|
Certificate of Merger.(9)
|
3.6
|
|
Articles of Merger between the
Company (as surviving company) and Nouveau Ventures Inc. (as merging entity),
with surviving entity changing its name to "Nouveau Ventures Inc."(9)
|
4.1
|
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Stock Incentive Plan.(2)
|
10.1
|
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Stock Incentive Plan.(2)
|
10.2
|
|
Convertible
Promissory Note for $25,000 dated July 1, 2012, amended January 23, 2013.(3)
|
10.3
|
|
Convertible
Promissory Note for $25,000 dated August 15, 2012, amended January 23, 2013.(3)
|
10.4
|
|
Convertible
Promissory Note for $25,000 dated September 26, 2012, amended January 23,
2013.(3)
|
10.5
|
|
Convertible
Promissory Note for $25,000 dated October 26, 2012, amended January 23, 2013.(3)
|
10.6
|
|
Convertible
Promissory Note for $25,000 dated December 6, 2012, amended January 23, 2013.(3)
|
10.7
|
|
Convertible
Promissory Note for $25,000 dated January 9, 2013, amended January 23, 2013.(3)
|
10.8
|
|
Convertible
Promissory Note for $25,000 dated February 23, 2013.(3)
|
10.9
|
|
Letter dated
January 24, 2013 confirming maturity dates of amended convertible notes.(3)
|
10.10
|
|
Exclusive
Distributor Agreement dated July 9, 2013 between the Company and California
Clean Air Technologies, LLC.(4)
|
10.11
|
|
Promissory Note in
favor of California Clean Air Technologies, LLC in the principal amount of
$50,000.(4)
|
10.12
|
|
Asset Purchase
Agreement dated July 1, 2013 between the Company and its wholly-owned
subsidiary, SaaSMAX Corp.(4)
|
10.13
|
|
Share Exchange
Agreement dated July 10, 2013 between the Company and Dina M. Moskowitz for
the transfer of shares of the Company’s wholly-owned subsidiary, SaaSMAX
Corp.(4)
|
10.14
|
|
Management
Consulting Agreement dated July 22, 2013 between the Company and Harold C.
Moll.(5)
|
10.15
|
|
Management
Consulting Agreement dated July 22, 2013 between the Company and Rob Rainer.(5)
|
10.16
|
|
Termination of
Management Consulting Agreement and Cancellation of Earn-Out Shares between
the Company and Harold C. Moll dated February 4, 2014.(6)
|
10.17
|
|
Mutual release
between the Company and Harold C. Moll dated February 4, 2014.(6)
|
10.18
|
|
Technology
Acquisition Agreement dated August 19, 2014 among the Company, David St.
James and the Company’s wholly-owned subsidiary, Nouveau Ventures Inc.(8)
|
10.19
|
|
Agreement and Plan
of Merger dated August 20, 2014 between the Company and Nouveau Ventures Inc.(8)
|
27
Notes:
(1)
|
Filed as an exhibit to our Registration Statement on Form S-1 filed on May 23, 2011.
|
(2)
|
Filed as an exhibit to our Registration Statement on Form S-1/A filed on August 15, 2011.
|
(3)
|
Filed as an exhibit to our Current Report on Form 8-K filed on April 17, 2013.
|
(4)
|
Filed as an exhibit to our Current Report on Form 8-K filed on July 15, 2013.
|
(5)
|
Filed as an exhibit to our Current Report on Form 8-K filed on July 25, 2013.
|
(6)
|
Filed as an exhibit to our Current Report on Form 8-K filed on February 6, 2014.
|
(7)
|
Filed as an exhibit to our Current Report on Form 8-K filed on April 17, 2014.
|
(8)
|
Filed as an exhibit to our Current Report on Form 8-K filed on August 21, 2014.
|
(9)
|
Filed as an exhibit to our Current Report on Form 8-K filed on September 9, 2014.
|
28
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
|
|
NOUVEAU VENTURES, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
Date: |
September 1, 2015 |
By: |
/s/ Rob Rainer |
|
|
|
ROB RAINER |
|
|
|
President, Chief Executive Officer, Chief Financial
Officer, Secretary and Treasurer |
|
|
|
(Principal Executive Officer and Principal Accounting
Officer) |
CERTIFICATIONS
I, Rob Rainer, certify that;
(1)
|
I have reviewed this Quarterly Report on Form 10-Q of Nouveau Ventures Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: September 1, 2015
/s/ Rob
Rainer
___________________________________
By:
Rob Rainer
Title: Chief
Executive Officer, Chief Financial Officer, President, Secretary and Treasurer
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Rob Rainer, the Chief
Executive Officer and Chief Financial Officer of Nouveau Ventures Inc. (the “Company”), hereby
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
|
(i)
|
the Quarterly Report on Form 10-Q of the Company, for the fiscal quarter ended March 31, 2015, and to which this certification is attached as Exhibit 32.2 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/ Rob Rainer
|
|
Name:
|
ROB RAINER |
|
|
|
|
Title:
|
Chief Executive Officer and Chief Financial
Officer, President Secretary and Treasurer
|
|
|
|
|
Date: |
September 1, 2015 |
A signed
original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
This
certification accompanies the Form 10-Q to which it relates, is not deemed
filed with the Securities and Exchange Commission and is not to be incorporated
by reference into any filing of the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934 (whether made before or after the date of
the Form 10-Q), irrespective of any general incorporation language contained in
such filing.
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